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New Uniform Act Rules: What’s Changed in Appraisal Practice?

New Uniform Act Rules: What’s Changed in Appraisal Practice?. AASHTO/FHWA 2005 Right-of-Way and Utilities Subcommittee Conference Austin, Texas May 18, 2005. Key Topics. Appraisal waiver and waiver valuation Appraisal and appraisal review

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New Uniform Act Rules: What’s Changed in Appraisal Practice?

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  1. New Uniform Act Rules: What’s Changed in Appraisal Practice? AASHTO/FHWA 2005 Right-of-Way and Utilities Subcommittee Conference Austin, Texas May 18, 2005 AASHTO 2005 Slide #1

  2. Key Topics • Appraisal waiver and waiver valuation • Appraisal and appraisal review • Uniform Act appraisal requirementsvs.USPAP standards • Qualifications • Responsibilities AASHTO 2005 Slide #2

  3. Appraisal Waiver • Maximum increased to $10,000 • Increased from $2,500 • Option available for up to $25,000 • Federal funding agency must approve • Owner must be offered option for appraisal • Prepare a waiver valuation instead AASHTO 2005 Slide #3

  4. § 24.2(a)(33)Waiver Valuation - New Definition …waiver valuation means the valuation process used and the product produced when the Agency determines that an appraisal is not required, pursuant to § 24.102(c)(2) appraisal waiver provisions. AASHTO 2005 Slide #4

  5. Waiver Valuation • Prepared by knowledgeable person • Not an appraisal • Review not required • Owner accompaniment not required • Agency responsible for • Basis for preparing • Establishing just compensation amount AASHTO 2005 Slide #5

  6. Criteria for Appraisals • Reference: § 24.103 and Appendix A • Rule defines appraisal requirements for federal and federally assisted real property acquisition • USPAP and UASFLA are non-regulatory • Rule is consistent with USPAP AASHTO 2005 Slide #6

  7. Working to Clarify and Maintain Consistency • Uniform Act (UA) appraisal requirements • USPAP standards AASHTO 2005 Slide #7

  8. USPAP Consistency • 2006 USPAP (2nd Exposure Draft, April 25, 2005) • Focus on “Scope of Work” • Departure is gone • Will do away with classifying Standards Rules as either “binding” or “specific” requirements, substituting clearer “when necessary” language for “specific requirements” AASHTO 2005 Slide #8

  9. Agency Responsibility • Acquiring Agency must assure that appraisals • Are relevant to its program needs • Reflect established and commonly accepted Federal and federally-assisted program appraisal practice • As a minimum, comply with both • Definition of appraisal in §24.2(a)(3) • Five requirements in §24.103(a)(2) AASHTO 2005 Slide #9

  10. Appraisal Assignment • References: § 24.103(a) and Appendix A • Agency is to participate in • Defining the appraisal problem • Developing the scope of work • Identify personal property AASHTO 2005 Slide #10

  11. Scope of Work • Written statement • Developed together by appraiser and Acquiring Agency • Matches the UA and UA rule requirements to the appraisal problem • References: § 24.103(a)(2) and § 24.103(b) • Prepared before appraisal work starts • May be updated as needed AASHTO 2005 Slide #11

  12. Appraiser and Review Appraiser Qualifications • References: § 24.103(d)(1), § 24.104 and Appendix A • Considerations/Factors • Competency • Experience • Education • Training • Certification/licensing • Professional designations AASHTO 2005 Slide #12

  13. Qualifications - Agency Responsibilities • Set criteria for minimum qualifications • Assure qualifications match the scope of work • Contract (fee) appraisers must be state licensed/certified AASHTO 2005 Slide #13

  14. Appraisal Review • References: § 24.104(a) to (c) and Appendix A • Review appraiser responsibilities • Examine analysis and presentation of data • Ensure satisfies all appraisal requirements • Determine that meets definition of appraisal in § 24.2 (a)(3) AASHTO 2005 Slide #14

  15. Review Appraiser Options • Recommend appraisal as basis for establishing the amount believed to be just compensation • Accept appraisal as complying with all requirements • Not accept appraisal, including reasoning AASHTO 2005 Slide #15

  16. Staff Review Appraiser Options • Approve the appraisal as basis for establishing the amount believed to be just compensation • If authorized, determine just compensation amount AASHTO 2005 Slide #16

  17. Conflict of Interest • References: § 24.102(n) and Appendix A • Appraisers, review appraisers, waiver valuation preparers • Shall not have any interest in the property • Shall not be subjected to influence or coercion regarding valuation • May be authorized to act as a negotiator where the acquisition is less than $10,000 AASHTO 2005 Slide #17

  18. Supervision and Influence or Coercion • Person functioning as negotiator cannot supervise or formally evaluate • Appraisers • Review appraisers • Persons performing waiver valuations AASHTO 2005 Slide #18

  19. Supervision and Negotiating • “Functioning as negotiator” • Makes initial just compensation offer • Initiates price negotiations AASHTO 2005 Slide #19

  20. Uniform Act Final Rule Implementation Resources • Video http://www.fhwa.dot.gov/realestate/ua/urahudbc022405.htm • Information Guide http://www.fhwa.dot.gov/realestate/ua/uraguide3805.pdf AASHTO 2005 Slide #20

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